CONSTRUCTION SERVICES AGREEMENT

(New Mexico – Private Project)

[// GUIDANCE: This template is drafted for a private‐sector construction project governed by New Mexico law. It is suitable for design–bid–build or design–build delivery. Insert or delete bracketed text as appropriate and attach project‐specific exhibits (scope, drawings, schedule, insurance certificates, bond forms, etc.).]

DOCUMENT HEADER

This Construction Services Agreement (the “Agreement”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:

1. [OWNER LEGAL NAME], a [state and form of entity], having a principal place of business at [address] (“Owner”); and
2. [CONTRACTOR LEGAL NAME], a [state and form of entity], having a principal place of business at [address] (“Contractor”).

Owner and Contractor are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

Recitals

A. Owner desires to engage Contractor to perform certain construction services in connection with the project described herein.
B. Contractor represents that it is duly licensed in the State of New Mexico to perform the Work (as defined below) and possesses the necessary expertise, personnel, and resources.
C. In consideration of the mutual covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

TABLE OF CONTENTS

1. Definitions
2. Scope of Work and Contract Documents
3. Contract Time; Scheduling; Delays
4. Price, Payment, Retainage, and Lien Compliance
5. Permits; Taxes; Safety
6. Changes in the Work
7. Representations and Warranties
8. Insurance and Bonds
9. Indemnification; Limitation of Liability
10. Default; Suspension; Termination
11. Dispute Resolution
12. General Provisions
13. Execution

1. DEFINITIONS

The following terms shall have the meanings set forth below. Capitalized terms used but not defined in a given Section shall have the meanings assigned in this Section 1.

“Applicable Law” means all federal, state, and local statutes, regulations, ordinances, codes, and case law interpretations, including, without limitation, the New Mexico Mechanics’ Lien Act, N.M. Stat. Ann. §§ 48-2-1 et seq., and any amendments thereto.

“Change Order” has the meaning set forth in Section 6.2.

“Claim” means any demand, cause of action, lien, loss, damage, cost, expense, or liability of any kind.

“Contract Documents” means (i) this Agreement, (ii) the Exhibits listed in Section 2.2, (iii) properly issued Change Orders, and (iv) field directives or written interpretations issued pursuant to this Agreement.

“Contract Price” means the not-to-exceed price of $[AMOUNT], subject to adjustment only as permitted under Section 6.

“Contract Time” has the meaning set forth in Section 3.1.

“Draw Schedule” means the progress payment schedule agreed upon by the Parties and attached as Exhibit B.

“Force Majeure Event” has the meaning set forth in Section 3.4.

“Lien Notice” has the meaning set forth in Section 4.6.

“Payment Bond” has the meaning set forth in Section 8.2.

“Project” means the construction, installation, and completion of [PROJECT DESCRIPTION AND LOCATION].

“Retainage” has the meaning set forth in Section 4.3.

“Site” means the real property on which the Project is located, more particularly described in Exhibit A.

“Subcontractor” means any person or entity, of any tier, retained by Contractor to furnish labor, materials, or equipment in connection with the Work.

“Work” means all labor, materials, services, equipment, and other obligations to be performed or furnished by Contractor under the Contract Documents.

[// GUIDANCE: Add additional defined terms as needed for design services, commissioning, warranties, etc.]

2. SCOPE OF WORK AND CONTRACT DOCUMENTS

2.1 Work. Contractor shall diligently perform and complete the Work in strict accordance with the Contract Documents, using its best skill and attention.

2.2 Contract Documents. The following documents are incorporated by reference:
(a) Exhibit A – Legal Description of Site
(b) Exhibit B – Draw Schedule
(c) Exhibit C – Plans and Specifications dated [date]
(d) Exhibit D – Insurance Certificate(s)
(e) Exhibit E – Payment Bond Form
(f) Exhibit F – Schedule of Values
(g) Exhibit G – Project Schedule

2.3 Priority. In the event of a conflict among the Contract Documents, the order of precedence shall be: (1) a fully executed Change Order; (2) this Agreement; (3) the remaining Exhibits, in the order listed above; provided, however, that more stringent requirements and higher standards shall govern.

3. CONTRACT TIME; SCHEDULING; DELAYS

3.1 Contract Time. Contractor shall commence the Work within [number] days after the Effective Date (the “Commencement Date”) and achieve Substantial Completion no later than [DATE] (the “Substantial Completion Date”), and Final Completion no later than [DATE] (collectively, the “Contract Time”), subject to adjustments approved in accordance with Section 6.

3.2 Schedule. Contractor shall submit and maintain an updated critical‐path Project Schedule (Exhibit G). Failure to meet interim milestone dates without approved extension constitutes a Contractor event of default.

3.3 Liquidated Damages. If Contractor fails to achieve Substantial Completion by the Substantial Completion Date, Contractor shall pay Owner liquidated damages of $[AMOUNT] per calendar day, not as a penalty but as a reasonable pre-estimate of actual damages.

3.4 Force Majeure. Neither Party shall be liable for delay caused by acts of God, war, terrorism, epidemic, governmental order, or other events beyond its reasonable control (“Force Majeure Event”); provided that the affected Party gives written notice within three (3) days after occurrence.

4. PRICE, PAYMENT, RETAINAGE, AND LIEN COMPLIANCE

4.1 Contract Price. Owner shall pay Contractor the Contract Price in accordance with this Article 4.

4.2 Progress Payments.
(a) On or before the [day] of each month, Contractor shall submit to Owner an Application for Payment covering Work completed through the prior month-end, verified by on-Site inspection.
(b) Each Application shall be accompanied by: (i) sworn statements and conditional lien waivers from Contractor and its Subcontractors for the prior pay period; (ii) an updated Project Schedule; and (iii) such other documentation reasonably requested by Owner.

4.3 Retainage. Owner will withhold retainage (“Retainage”) equal to [five percent (5%)] of each progress payment, not to exceed New Mexico statutory limits, and shall release Retainage within (i) sixty (60) days after Substantial Completion of the Work performed under this Agreement, or (ii) as otherwise mandated by Applicable Law.

[// GUIDANCE: N.M. law generally limits retainage on public works to 5%. While not expressly imposed on private projects, many New Mexico owners adopt the same limit to align with statutory policy.]

4.4 Final Payment. Contractor’s final Application for Payment shall include (i) unconditional final lien waivers from Contractor and all Subcontractors; (ii) certificates of occupancy (or equivalent), warranties, as-builts, O&M manuals, and other close-out deliverables; (iii) evidence of removal of temporary facilities and rubbish; and (iv) a release of claims.

4.5 Payment Disputes. Owner may withhold amounts for defective Work, third-party claims, or lien exposure. If undisputed amounts are not paid within thirty (30) days of receipt, Contractor may charge interest at the lesser of 8% per annum or the maximum rate permitted by law.

4.6 Lien Notice Requirements.
(a) Contractor shall, within fifteen (15) days after execution hereof, record a Notice of Contract if required by Applicable Law.
(b) Contractor shall timely serve all notices and disclosures required under the New Mexico Mechanics’ Lien Act to preserve its own and its Subcontractors’ lien rights, including any preliminary notice of right to claim a lien (each, a “Lien Notice”).
(c) Contractor shall include in every subcontract a requirement that the Subcontractor timely provide any statutorily mandated Lien Notice.
(d) Failure by Contractor or its Subcontractors to comply with lien notice procedures shall not relieve Contractor of its obligations under this Agreement and shall be deemed a Contractor event of default.

5. PERMITS; TAXES; SAFETY

5.1 Permits & Licenses. Contractor shall obtain and pay for all permits, licenses, inspections, and governmental fees.

5.2 Taxes. Contractor is responsible for all federal, state, and local taxes related to the Work, except sales tax exemptions expressly provided by Owner.

5.3 Safety. Contractor shall comply with OSHA, NMOSHA, and all Site‐specific safety rules, and shall be solely responsible for protection of persons and property.

6. CHANGES IN THE WORK

6.1 Owner-Initiated Changes. Owner may, by written directive, order changes in the Work. Any adjustment to the Contract Price or Contract Time shall be set forth in a mutually executed Change Order.

6.2 Change Order Procedure. Within five (5) days of a change directive, Contractor shall submit a written proposal, including itemized cost and schedule impact. Failure to comply constitutes a waiver of adjustment.

6.3 Emergencies. In emergencies threatening immediate harm, Contractor may act without prior approval, but shall notify Owner within twenty-four (24) hours, after which a Change Order shall be processed as set forth above.

7. REPRESENTATIONS AND WARRANTIES

7.1 Contractor’s Representations. Contractor represents and warrants that:
(a) it holds all required licenses and is in good standing under the laws of New Mexico;
(b) the Work will conform strictly to the Contract Documents and will be free from defects in materials and workmanship for a warranty period of [one (1) year] from Final Completion (or such longer period as stated in the Contract Documents);
(c) materials and equipment furnished will be new, of good quality, and free of liens; and
(d) it has not relied on any representations of Owner except as expressly set forth herein.

7.2 Survival. The representations and warranties in this Article 7 survive Final Payment and termination of this Agreement.

8. INSURANCE AND BONDS

8.1 Insurance. Contractor shall maintain, at its sole expense and for the duration of the Work, insurance in at least the following amounts:
(a) Commercial General Liability: $[1,000,000] per occurrence / $[2,000,000] aggregate
(b) Automobile Liability: $[1,000,000] combined single limit
(c) Workers’ Compensation: statutory limits; Employers’ Liability $[1,000,000]
(d) Builder’s Risk / Installation Floater: full replacement cost of the Work
(e) Professional Liability (if design services): $[1,000,000] per claim

Owner and any lender shall be named as additional insureds (except Workers’ Compensation). Policies shall be primary and non-contributory.

8.2 Payment Bond. Within ten (10) days after the Effective Date, Contractor shall furnish Owner with a payment bond in the penal sum of 100% of the Contract Price (a “Payment Bond”) issued by a surety authorized to do business in New Mexico and rated A- or better. The Payment Bond shall satisfy the substantive requirements of the New Mexico Little Miller Act, N.M. Stat. Ann. §§ 13-4-18 et seq., whether or not the Project is public in nature.

[// GUIDANCE: Owner may also require performance bonding. Insert additional bond language if desired.]

9. INDEMNIFICATION; LIMITATION OF LIABILITY

9.1 Indemnification by Contractor. To the fullest extent permitted by Applicable Law, Contractor shall defend, indemnify, and hold harmless Owner, its affiliates, lenders, and their respective officers, directors, agents, and employees from and against any Claim arising out of or relating to (i) the performance of the Work, (ii) the breach of any obligation, representation, or warranty by Contractor, or (iii) any lien or bond claim by a Subcontractor, except to the extent caused by the sole negligence or willful misconduct of Owner.

9.2 Limitation of Liability. NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE TOTAL AGGREGATE LIABILITY OF EITHER PARTY FOR ALL CLAIMS (EXCLUDING CONTRACTOR’S INDEMNITY OBLIGATIONS AND INTENTIONAL MISCONDUCT) SHALL NOT EXCEED THE CONTRACT PRICE.

9.3 Consequential Damages. Except with respect to liquidated damages under Section 3.3, neither Party shall be liable for incidental, consequential, special, or punitive damages.

10. DEFAULT; SUSPENSION; TERMINATION

10.1 Contractor Default. Any of the following constitutes a Contractor event of default:
(a) failure to materially comply with the Contract Documents or Applicable Law;
(b) failure to prosecute the Work diligently;
(c) failure to pay Subcontractors or suppliers when due;
(d) filing of bankruptcy or receivership;
(e) falsification of records or lien waivers.

10.2 Notice and Cure. Owner shall give Contractor written notice specifying the default. Contractor shall cure within seven (7) days (or as otherwise stated). If Contractor fails to cure within such period, Owner may, without prejudice to other remedies, (i) supplement or take over the Work and deduct the cost, or (ii) terminate for cause.

10.3 Suspension by Owner. Owner may suspend the Work for convenience upon forty-eight (48) hours’ notice. Contractor shall resume promptly upon notice to proceed and shall be equitably adjusted for cost and time.

10.4 Termination for Convenience. Owner may terminate this Agreement for convenience upon seven (7) days’ written notice. Contractor shall be paid (i) the portion of the Contract Price allocable to Work satisfactorily performed, plus (ii) reasonable demobilization costs, but in no event more than the Contract Price.

10.5 Contractor Right to Terminate. If Owner fails to pay undisputed amounts within thirty (30) days after due written notice, Contractor may suspend Work. If non-payment continues for an additional thirty (30) days, Contractor may terminate and recover amounts due plus reasonable demobilization costs.

11. DISPUTE RESOLUTION

11.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New Mexico, without regard to conflict-of-law rules.

11.2 Forum Selection. The Parties submit to the exclusive jurisdiction of the state courts of New Mexico located in [County], and appellate courts therefrom, for any action arising out of this Agreement.

11.3 Optional Arbitration. At either Party’s election, any dispute exceeding $[250,000] in controversy shall be resolved by binding arbitration administered by the American Arbitration Association (“AAA”) under its Construction Industry Arbitration Rules then in effect; provided, however, that (i) the arbitrator(s) shall apply New Mexico substantive law, (ii) discovery shall be limited to the AAA Fast Track Procedures unless otherwise agreed, and (iii) the award shall be final and judgment may be entered thereon in any court of competent jurisdiction.

[// GUIDANCE: Delete Section 11.3 or change “shall” to “may” if arbitration is not desired.]

11.4 Jury Trial Waiver. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY PROCEEDING.

11.5 Injunctive Relief. Nothing in this Article 11 shall limit either Party’s right to seek temporary or preliminary injunctive relief or specific performance in a court of competent jurisdiction.

12. GENERAL PROVISIONS

12.1 Independent Contractor. Contractor is an independent contractor and not an agent or employee of Owner.

12.2 Assignment. Neither Party may assign this Agreement without the prior written consent of the other, except Owner may assign to a lender as collateral.

12.3 Notices. All notices shall be in writing and deemed given when (i) delivered personally, (ii) sent by recognized overnight courier, or (iii) deposited in certified U.S. mail, return receipt requested, to the addresses first written above (or as updated by notice).

12.4 Severability. If any provision is held invalid, the remaining provisions shall remain in effect. The invalid provision shall be modified to the minimum extent necessary to render it valid.

12.5 Waiver. No waiver is effective unless in writing and signed by the waiving Party.

12.6 Entire Agreement. The Contract Documents constitute the entire agreement between the Parties and supersede all prior discussions. No amendment is binding unless in a writing signed by both Parties.

12.7 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original. Electronic signatures delivered via DocuSign, PDF, or similar are deemed original for all purposes.

12.8 Attorney Fees. The prevailing Party in any dispute shall be entitled to recover reasonable attorney fees, expert fees, and costs.

12.9 Headings. Headings are for convenience only and do not affect interpretation.

13. EXECUTION

IN WITNESS WHEREOF, the Parties have executed this Construction Services Agreement as of the Effective Date.

[ NOTARY ACKNOWLEDGMENT – Add if required ]

[// GUIDANCE: For New Mexico recording of mechanics’ liens, notarization is generally required on the lien claim, not on the construction contract itself; however, certain lenders may request notarization. ]

END OF DOCUMENT